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As the Trustee of a Trust in New York, What Responsibilities Can We Manage for You?

Being the trustee of a trust is a very important role as you protect the interests of a beneficiary in Suffolk and Nassau County. The beneficiary may include an individual who needs your support and protection for various reasons listed below under New York trust indicators.

Often, a trust is established so that the beneficiary can use funds left to them in an estate or gifted during an individual’s lifetime. A trust can preserve certain government benefits that are means-tested for the beneficiary in New York. If the terms of the trust are violated, this could jeopardize the beneficiary’s benefits.

Responsibility #1: Understand the Benefit

With respect to a special needs trust, an important responsibility of the trustee is to fully understand the benefits that the beneficiary with special needs is receiving. For example, if the beneficiary receives Supplemental Security Income (SSI) or Medicaid, there are certain restrictions on what they are allowed to receive.

Responsibility #2: Ensure Proper Distributions

The trustee of a trust can ensure that proper distributions are being made from the trust. They confirm that the distributions follow the terms and restrictions of the trust based on certain language that prohibits or allows specific distributions.

Responsibility #3: Follow Tax Reporting Requirements

In addition to making sure that distributions are made properly, another responsibility of the trustee of a trust is to follow all tax reporting requirements. Trustees are required to file the trust income tax returns. Following these rules and guidelines are crucial because the beneficiary will be penalized if taxes aren’t filed properly and timely.

Responsibility #4: Properly Invest Assets

Another responsibility of the trustee is to make sure assets are invested properly. The trustee must invest the trust assets in a manner that will result in the best use and growth of the assets. The trustee may hire a qualified financial professional to make sure this is being accomplished. They must also keep accurate records of any distributions made and any other transactions going in or out of the trust.

The duties listed above should not be taken lightly. The trustee is held to a fiduciary standard. Mismanagement of the trust may result in financial harm to the beneficiary.

We recommend professional legal guidance to ensure that your trusts are managed properly in the state of New York.

New York Trust Indicators in New York (Nassau County, Suffolk County, and New York City, NY)

  1. A child experiences divorce or death
  2. A child has special needs
  3. Problems with a child or a child’s spouse (e.g., drugs, alcohol, gambling problems)
  4. The suggestion that a child or a child’s spouse is spendthrift
  5. The suggestion that a child or a child’s spouse isn’t motivated to work
  6. The suggestion that a child or a child’s spouse has health problems
  7. The suggestion that a child or a child’s spouse has financial problems, lost a job, their job is in danger, or they’ve had prior bankruptcy
  8. A child is remarried with stepchildren
  9. A child has significant assets going to one or more children
  10. You have significant retirement funds
  11. You want to keep real estate intact for heirs
  12. A child is or may become disabled
  13. A child is young or otherwise not capable of managing funds
  14. A child has or is in a job and likely to have significant assets on their own
  15. You have been sued
  16. A child or spouse has been sued
  17. A child or spouse has a job with a high potential for lawsuits
  18. You dislike your child’s spouse
  19. You want to make sure inheritance doesn’t remove your child’s incentive to work
  20. You have specific goals for kids or grandkids (e.g., going to college, working despite inheritance)
  21. You are worried someone might sue to attack the plan
  22. You wish to protect assets for future generations (dynasty)
  23. You wish to give away assets today (Crummey safe trust)
  24. You wish to protect a pet

Russo Law Group, P.C. helps you and your loved ones with Estate Planning, Elder Law, Special Needs Planning, New York Medicaid Planning, Trust & Estate, Guardianship, Small Business Planning, and Real Estate law. We welcome you to contact our Garden City, Lido Beach, or Islandia, New York, law offices to learn more about how we can help address your estate planning legal matters.

If you have questions or concerns about New York fiduciary services in Long Island and New York City communities, please don’t hesitate to contact the New York estate planning attorneys at Russo Law Group, P.C. While we have several office locations, we can also visit your home and offer virtual meetings for your convenience.

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